Environmental groups sue TVA over new fixed fee

Five environmental advocacy groups have filed a lawsuit challenging the Tennessee Valley Authority's plan to implement fixed fees on its electric customers, regardless of how much electricity they use.

The groups argue that the fees are an "attack" on customers who generate their own electricity via solar panels and will prevent residential and business customers from substantially reducing their bills by using less power.

The lawsuit was filed Thursday in the Northern District of Alabama by the Center for Biological Diversity, Friends of Earth, Energy Alabama, Gasp, and the Southern Alliance for Clean Energy.

TVA says the fee, called a "grid access charge," will help families by making their electric bills "more stable."

The TVA board of directors approved the policy in May, and it is scheduled to go into effect in October. The utility says the restructuring is not a rate increase because the variable rates will decrease as the fixed fee is implemented.

TVA will charge the new fee to local power companies that distribute TVA-generated electricity to customers in a seven-state region that includes much of the northern third of Alabama. The local customers will see the fee reflected in their bills.

"TVA's move to increase fixed fees on monthly bills is intended to undercut customers' ability to control energy costs through energy efficiency and solar investments," Stephen A. Smith, executive director of the Southern Alliance for Clean Energy said in a news release.

"The devious 'grid access charge' will only accelerate the high-bills problem by increasing fixed fees and stifling efforts to control electric consumption by families and small businesses, leading to higher costs and more pollution. This legal action seeks to educate people about what is happening to them each and every month."

The groups also argue that TVA's environmental assessment finding of "no significant impact," violated the National Environmental Policy Act "by failing to disclose and consider the reasonably foreseeable environmental impacts of all of these Anti-Solar Rate Changes."

TVA's assessment of several proposed fixed charge options projects that the chosen rate structure (C1) will also decrease the average rates for large businesses, providing an incentive for economic development.

"TVA expects minor positive effects to large commercial customers and minor negative effects to Standard Service and large manufacturing customers," the document states. "Alternatives B, C1, C2 and D would lower rates for large commercial customers and make the rates more competitive. Rates for Standard Service and large manufacturing customers would increase, however, but remain competitive."

The groups believe that the measure will also prop up legacy fossil fuel plants by discouraging adoption of distributed energy resources.

"TVA's rate changes are about one thing and one thing only," Daniel Tait, technical director for Energy Alabama, said. "Killing energy efficiency and renewable energy to protect its monopoly stranglehold on regular folks."

Michael Hansen, executive director of Birmingham-based group Gasp, said the move will provide an additional roadblock for a solar industry in Alabama that is already facing significant hurdles.

In addition to the environmental groups, some public officials like Nashville Mayor David Briley have been critical of the plan. Briley told the Chattanooga Free Press the move would hurt Nashville's efforts to become the "greenest city in the South." The Tennessee Small Business Alliance and the NAACP have also expressed opposition to the new rate structure.